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Compound Interest

S

subhapratimdas

New Member
I would like to prepare a template for knowing how much Interest will I receive on a Monthly basis if I invested 10k at 9% daily compounding interest


Enter Investment Amount -- 10000

Enter Interst Rate(Daily compounding) - 9%

Time of Investment-(Term in Years) - 5


If I input above then following table should populate


Months Opening Interest Principal Closing

1 10000 75 10000 10075

2 10075 75.5 10075 10150.5

3 10150.5 76 10150.5 10226.5

4 10226.5 76.5 10226.5 10303

So on


Regards

Subha
 
Just to clarify, I think you meant that the 9% interested is your APR, not your daily rate. If you've managed to actually find something that earns 9% daily I will hire you as my investment broker.
 
Hi Luke ,


I think what is meant here is that the compounding is daily ; compounding can also be weekly , monthly , quarterly , annually and so on. An annual rate of 9 % with annual compounding is still 9 %. But if the compounding becomes monthly , then the equivalent annual rate will be more than 9 %.


Narayan
 
Making 3 columns of Months, Principal, Interest, where Month's column is simply a series of numbers.


Assuming Investment amount is in A1, Interest Rate is in B1, Time is in C1.


Assuming Table headers are in row 3.

First formula in Opening column is simply

=A1

After that, formula is:

=SUM(B4:C4)

copied down.


Formula in Interest column is:

=(A4<$C$1)*$B$1/12*B4

copied down.
 
Hi Das ,


This is just out of academic interest ; can you tell me what happens in compounding ?


From the figures you have given , 75 is the monthly interest for the first month , calculated on the basis of 9 % annual interest rate ( (10000*9/100)/12 = 75 ).


The second month the principal on which the monthly interest is calculated is now 10000+75 ; is this correct ?


Is this compounding a daily compounding or a monthly compounding ?


Narayan
 
Thanks Luke, it was APR compounding, even I would love to find out some investment avenues with 9% daily..


@ Narayan.. yes its 10000+75 which will form the Principal Amount for months 2 computation..


Regards

Subha
 
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